Economy Act of 1933

The controversial Economy Act of 1933 is signed into law, slashing $243 million in government salaries and pensions, and veterans' benefits. Despite the economic crisis, super majorities of American economists, policymakers, and the general public believed that the federal government needed to balance the budget and avoid deficit spending, to avoid putting further strain on the bond market which would negatively affect government borrowing costs, banks, corporations, and foreign investors. From 1929 to 1933, the total debt owed by the U.S. government rose from $16.9 billion to over $23 billion.